Case Study: (Banking Industry) Data Residency, High availability, and DR in Azure

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Scenario: Banking Industry

Banks handle sensitive financial data that is subject to stringent data residency requirements, ensuring that data is stored and processed only within specific geographical boundaries. They also need high availability (HA) to ensure that banking services (e.g., online transactions) are always up and running, as well as disaster recovery (DR) to recover quickly in case of failures or disasters.

Use Case: Cross-country Banking Application

A large international bank operates in multiple countries and must comply with regulations that require customer data to reside in the country of origin. They want to provide seamless online banking services while ensuring high availability and disaster recovery.

Solution Using Azure

1. Azure Region Selection for Data Sovereignty

To comply with data residency and sovereignty laws, the bank should carefully select Azure Regions within each country or compliance zone. Azure provides geo-redundant regions that are paired within the same country or compliance zone for services like high availability and disaster recovery.

  • Primary Region: The bank can choose an Azure region in the country where the data must reside (e.g., Azure East US for US customers).
  • Paired Region: A paired region, also within the US (like West US), can be selected for disaster recovery to avoid data leaving the country. This maintains compliance with US data sovereignty laws.

In countries where multiple regions aren’t available, the bank can use Availability Zones within a single region to ensure HA.

2. Azure Availability Zones for High Availability (HA)

For high availability, the bank can deploy its banking application using Azure Availability Zones, which are physically separate locations within an Azure region. Each Availability Zone has its own power, cooling, and networking, ensuring that a failure in one zone does not impact the others.

  • Scenario: The bank’s core online banking system is deployed across three Availability Zones in Azure East US. Even if one zone goes down (due to hardware or power issues), the service remains available via the other zones.
  • Active-Active Deployment: A load balancer distributes traffic across the zones to ensure that the application continues to function without downtime.

3. Azure Site Recovery for Disaster Recovery (DR)

For disaster recovery, the bank can use Azure Site Recovery (ASR), which replicates virtual machines (VMs) and data to another region within the same country (to meet data sovereignty requirements).

  • Scenario: The bank replicates its VMs in Azure East US to Azure West US, so in case of a regional disaster (e.g., East US goes offline), the bank can quickly fail over to West US without breaching data residency laws, as both regions are within the US.

Azure Site Recovery allows for automated failover testing to ensure that the DR plan is functional, and the bank can periodically run disaster recovery drills without impacting the production environment.

4. Encryption and Compliance Controls

Azure provides built-in encryption (both in-transit and at-rest) to secure data and prevent unauthorized access. In the banking scenario, this ensures that even if data is replicated or backed up for HA and DR purposes, it remains encrypted.

Azure’s compliance certifications (e.g., ISO 27001, SOC 2, PCI DSS for financial services) are also critical. The bank can use Azure Policy to enforce organizational policies that ensure only compliant services are used and that data does not leave the required regions.

5. Azure ExpressRoute for Secure Connectivity

For banks that require private and secure connections, Azure ExpressRoute can be used to establish private, dedicated network links between on-premises data centers and Azure, bypassing the public internet.

  • Scenario: The bank uses ExpressRoute to connect its primary data center in New York to the Azure East US region, ensuring fast, secure, and low-latency communication between its on-premises environment and Azure.

Summary

In this banking use case, Azure enables the bank to comply with data sovereignty laws by:

  • Storing and processing data in the appropriate Azure regions.
  • Using Availability Zones within regions for high availability.
  • Leveraging Azure Site Recovery for disaster recovery to paired regions within the same country or compliance zone.
  • Implementing robust encryption and compliance policies to protect data.
  • Using Azure ExpressRoute for secure, private connectivity.

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